Poor slum communities in many countries are becoming increasingly organised, and are collectively undertaking slum development demonstration projects at various scales. Homeless International provides small-scale grants in the form of capital to help partners establish and develop revolving loan funds to finance small-scale slum development projects. Through carrying out these projects, poor communities develop the skills, organisational capacity and knowledge needed to scale up these initiatives to a settlement or even city-wide level. However, larger scale slum development requires a huge amount of capital, which poor communities simply do not have. Communities find it difficult to access loan capital to finance such developments, because financial institutions have traditionally shied away from lending to such communities. Banks typically see lending to poor people as both risky and expensive to manage. Poor people tend to earn low incomes, often work without a formal employment contract, have no significant material assets such as land, and are often unfairly viewed as untrustworthy. Homeless International has therefore developed the Guarantee Fund in collaboration with our partners to address this problem. The fund works by offering banks a financial guarantee against a loan. The guarantee is put in place to cover (or at least minimise) a potential loss incurred by the lender in the event of default by the borrower. Guarantees can help banks, the poor and the NGOs that support them to form partnerships which provide a means to improve the knowledge and understanding between each party, and as a result can dilute or even dispel prejudices that may exist. This can lay the basis for longer term lending and saving arrangements and enable the poor and their NGO allies to negotiate more favourable terms and conditions for financing. Homeless International requires support from additional Guarantee Fund depositors to meet the demand for this innovative service. For more information on current Guarantee arrangements with our partners and the projects for which loans were secured, please visit the Guarantee Fund section of the Homeless International website.